Portfolio

Exchange rate, FX.

Investments, emergency fund, savings, nest egg.

Tino kai, tino ora te kōpū — Those who have the produce of their labour stored up will never want for anything
- Whakataukī 

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A poison pill is a defence tactic used by companies to prevent a hostile takeover from a person, people or another company whose aim is to take control of a company without board approval. If someone buys 15% or more of a company’s shares, the poison pill can activate, meaning other shareholders could get a discount on new shares, which would dilute the acquirer’s holding in the company, and therefore their ability to take control of it. Courts recognise poison pills as a valid defence against hostile takeovers.

A public company, or publicly traded company, is a company listed on a stock exchange or the OTC markets. Ownership of the company’s stock is divided into shares. Public companies publish annual reports have higher levels of reporting, regulations, and public scrutiny compared to private companies, including being required to disclose financial information about their operations, including revenue, profit and net loss. Going public is another way of saying a company is going through an initial public offering (IPO). It’s a less formal term to describe how a company is moving from private ownership - owned by their founders, financial backers, and employees - to public ownership, where anyone can buy shares in the company on a share market.

A prospectus, or offer document, must be filed with the relevant stock exchange and be made publicly available, along with the S-1 for listing in the US, before a company can list shares for sale on a share market. Before investing in a company, investors can use this document to conduct their due diligence - looking at the company's assets, liabilities, financial performance, risk factors, and commercial potential for growth. The prospectus is updated before the listing date when the IPO price and number of shares are determined through the IPO process.

The prospectus includes information, such as how much money the CEO stands to make when the company makes their public debut, how much money a company intends to raise in their IPO, and what the company plans to do with the money (such as for growth or to pay off debt). It also includes information about a company’s competitors, and importantly, it’s the first time the world gets to take a look at the company’s total financial picture.

Profit is the money left after paying expenses. In a company's earnings, there are three main types of profit to look for:

• Gross profit: Remaining money after paying for goods or services a company sells
• Operating profit: What remains after a company also pays operating costs, such as rent, electricity, phones, Wi-Fi and, in some cases, employees or contractors
• Net profit: The final figure that represents what a company made after deducting all costs, debts, and taxes. In other words, net profit is what a company gets to keep.

Investors look at a company’s profit to decide whether it has been successful in the quarter, where:

• Gross profit shows the capability of the company to make money
• Operating profit indicates that that company is making money
• Net profit reveals how much money remains in the hands of the company after taxes and costs

The price range, or indicative price, is an estimated price range given to potential investors of an IPO to give them an idea of the final price they’ll likely pay for shares. It’s set by both the company and the underwriter. It’s not guaranteed that the final price will be in this range; it’s meant as a guide only for potential investors.

Priced in is a term used to describe a stock's price. It means that the market has already adjusted for the probable impact of positive or negative news affecting a company. For example, when upcoming events or expectations are widely known, they may already be reflected in a stock price. So if investors anticipate a company’s positive earnings, the stock price may already be higher and reflect this expectation. Similarly, if investors expect a company to report negative earnings - losses - the stock price may have already dropped and be priced in. Understand more about how share prices are calculated.

The combined holdings owned by an investor, which is all the company shares and exchange traded funds (ETFs) they own, is called a share portfolio. In its wider context, a portfolio may also include all their other investments, such as real estate, bonds and more.

Passive usually refers to a passive investment strategy, which means an investment team or fund manager isn't making active investment decisions to try to beat an index. Instead, in a passive strategy, they endeavour to replicate the performance of an index. Because there's no human expertise involved, passive ETFs usually have lower fees. Fans of passive investing point to evidence that in the long run, it's unusual for an actively managed fund to beat an index and they prefer the low fees.

When a company goes public, they list their shares on the primary market where institutional investors, like hedge funds, investment banks and venture capitalists can buy them during the IPO period. After it’s public, anyone can buy and sell shares through a secondary market, known as a share market or stock exchange, such as the Nasdaq or the NYSE.

The p/e ratio is a metric that compares the share price to the earnings per share. It can be used with other metrics to show a company’s performance over time, or compare companies in the same industry.